Has Australia already passed its labour force peak?

Australia inevitably has to reach its peak of labour force participation sooner or later. Michael Janda says that limit may already have been reached in November 2010.

The Reserve Bank has joined a growing number of economists wondering why the unemployment rate has not gone up more, given the virtual stagnation in job creation.

As the population increases, the number of jobs also needs to grow just to keep unemployment steady - that is why you will often see stories reporting the creation of 5,000 or 10,000 jobs, yet unemployment rising.

However, lately, the Australian economy has been adding tiny numbers of jobs, and even shedding jobs in some months, yet the unemployment rate has remained fixed in a range between 5 and 5.3 per cent for the past year. The last figure in August was towards the lower end of that range at 5.1 per cent.

The main reason unemployment has not risen is that participation has fallen.

UBS economists Scott Haslem and George Tharenou explained this phenomenon in a recent note:

Historically, the participation rate has a long-term uptrend, and tends to only fall amid weak jobs growth (i.e. 'discouraged workers').

In this cycle, the participation rate dropped 1 per cent to a six-year low - driven lower by males, and young/middle-age groups exiting the labour force.

However, this fall is unusually large, relative to the extent of slowing in jobs growth (to 0.5 per cent year on year), and has arguably 'hidden' what normally should have been a more significant rise in the unemployment rate.

What is the participation rate? Many analysts simply describe it as a measure of those in work or looking for work as a proportion of the working age population. Except it isn't.

The participation rate actually measures those in work or looking for work as a proportion of the population aged over 15.

What is the difference? The difference is the 14 per cent of the population aged 65 and over who are captured as part of the participation rate measure, but are highly unlikely to actually be in the workforce.

The participation rate has always been measured that way, so it has always captured the retired segment of the population, which skews it downwards.

The issue that makes analysing medium-term trends in participation, and thus unemployment, difficult at the moment is the trend towards longer lifespans and the bulge of boomers who are starting to enter retirement.

On the second front, as has been well publicised through studies such as the Federal Government's series of Intergenerational Reports, not all age cohorts are equal.

That is being reflected in a gradual rise in the proportion of the population above retirement age, which climbed from 13.2 per cent in 2006 to 14 per cent in the last census in 2011.

The proportion of the population within 10 years of retirement also climbed from 11 to 11.6 per cent, indicating there are plenty more years of the retirement bulge to come.

In a recent speech, the Reserve Bank's deputy governor Philip Lowe said the bank estimates this ageing effect, by itself, has probably taken about 1 percentage point off the participation rate since it really kicked off in the mid-2000s.

Since the peak of participation in late 2010, the total participation rate has fallen 1 percentage point to 65 (in the ABS employment figures for August).

The participation rate for people under retirement age (15-64) has only declined 0.6 of a percentage point, which certainly implies that the counting of those over 65 has contributed disproportionately to the slide in participation from its highs.

However, UBS data based on the more specific ABS age cohort employment data and seasonally adjusted by the bank shows the biggest falls in participation have been for the 15-19, 20-24 and 45-54 age groups, particularly among men.

"This suggests the recent fall in overall participation was not entirely driven by an ageing population," conclude Scott Haslem and George Tharenou.

On Wednesday, Dr Lowe reached a similar conclusion, saying the ageing effect had been largely offset by a tendency for Australians to work until they are older, and also through the increased participation of women in the workforce.

Indeed, over the past 30 years, this strong social trend has fundamentally altered the labour market with the rising participation of women not only making up for the falling participation of men, but also lifting the total participation rate from the low 60 per cent range to its peak of 66 in November 2010.

Greg Jericho wrote a detailed analysis of this trend for The Drum on Wednesday. However, if you look at Greg Jericho's graphs, you will notice that the increase in female participation has slowed significantly after its strong rise in the 1980s and '90s.

This is logical and inevitable, growth in participation cannot be perpetual - for both men and women, there will always be some proportion of working age people who, due to children or other life circumstances, choose not to work or look for work.

It perhaps raises the question of whether Australia has passed its peak of labour force participation, as inevitably has to occur one day.

Between the combination of a large baby boomer cohort ready and starting to retire, and a possible peak in the participation of younger people, where any further rise in female participation may be fully offset by a further fall in male participation, maybe Australians have decided enough of us are working?

Dr Lowe suggests that the high level of structural change and job turnover in the economy may be causing people to spend more time out of the workforce before looking for another job, or that the disproportionate fall in construction jobs, where many people are self-employed, may also be contributing to lower participation rates.

From an economic point of view, both these causes would suggest there is a larger pool of unused but willing labour out there than either the unemployment or underutilisation rates suggest.

However, in his analysis of the participation rate, JP Morgan economist Ben Jarman has observed that an increasing proportion of people seem to be exiting the labour market directly from employment, rather than after a period of looking for work:

There has been a subtle pivot toward exits by the employed, relative to the unemployed: the unemployed/employed split for labour market leavers has fallen from 0.52 in May to 0.44 in August.

This suggests that discouragement among the jobless has not been the catalyst for the slide in participation.

Whether and when those people who seem to have elected to leave the workforce come back will be critical to where the unemployment rate goes from here.

However, there are limits to what proportion of the population can work at any one time and how many hours those people can work, and perhaps Australia hit that limit in November 2010.

Michael Janda is the ABC's online business reporter. View his full profile here.

Comments (63)

telfer cronos:

11 Oct 2012 9:01:20am

"Whether and when those people who seem to have elected to leave the workforce come back will be critical to where the unemployment rate goes from here".

According to advice from my father in the 1950's, unemployment rate is set as government policy, in order to keep down demands for higher wages. I suspect that he knew the truth, as he was a lowly paid lackey of an employer's organisation.

JohnnyBgood:

11 Oct 2012 5:36:36pm

TC, your father had a point. Now in my early 60's with my skills worthless due to the collapse of the industry I worked in during my best years I am forced to compete with & work alongside overseas students at very low pay rates cleaning. Perhaps if there were fewer cleaners the pay rates would be a bit better allowing better quality food on my table, new clothes instead of Op shop handme downs. One of the reasons that my industry collapsed was State Gov't's back in the 1980's sponsored our potential customers to WA to show them how it was all done. They fast learners & they took our knowledge / expertise to developing countries with cheap labour & so our trade collapsed.

David:

11 Oct 2012 9:34:04am

The rise in jobs but increase in unemployment is far from sustainable. Unless we can grow or at least stabalise our econemy without a population rise, we are going to have a large eceonmic/social/environmental crash sooner or later.

Is there any word on the number of skilled migrants being accepted? 2011 was an all time high and I doubt it has been decreased in 2012

libertarian:

11 Oct 2012 1:58:24pm

Don't worry, we have the worlds greatest Treasurer. I note the unemployment rate was higher today. In keeping with tradition the worlds greatest Treasurer was nowhere to be seen and pushed Shorten out there instead. We may see Swan again if there is any good data in future, otherwise he may slither back under his rock forever.

Applaudanum:

chalkie:

Miowarra:

11 Oct 2012 9:48:30am

Where one hour per week paid employment is considered as statistically significant, where employers keep demanding increased productivity (i.e more output for the same remuneration), where the increased casualisation of the workforce has stolen all sense of secuity for workers and where the union movement has co-operated in its own emasculation as a body capable of fighting for workers' rights,is it any surprise that the participation rate has dropped?

blax5:

11 Oct 2012 11:43:26am

Please allow me to add: One man's flexibility is the other man's job insecurity. On Q & A Christopher Pyne suggested we talk about job insecurity, and it was meant to be a critical talk. You cannot address job insecurity and have more flexibility at the same time.

I have long stopped to take the unemployment statistics seriously since I learned that one hour of paid work counts as employed. Long ago, I did an 18 months statistcs course at university so I only ever accept statistical figures as an indication of trend.

Merlin 23:

Wino:

11 Oct 2012 10:49:28am

Sure, Merlin 23, that should be done, right after the casual employment is forbidden by law. See, the unemployment benefit in very many cases is not an actual "unemployment" benefit in as much as it tops up the salary for those unfortunates with irregular weekly hours of work (anything over 1h per week counts as "employment").

You cannot have the neoliberal mantra of "flexible workplaces" and in the same time shut down the welfare system. Those slaves need to eat something occasionally, you know.

Wino:

11 Oct 2012 12:13:13pm

But see, you don't understand. It is our neoliberal overlords and subsidised banksters who "just sit back and wait [] to be served". Sure enough, it is much easier to kick those who are already down and out.

blax5:

Rae:

Social Security cannot be abolished whist business pays wages below the level needed to live.

This is not America and we are not geared to providing safe accommodation in the car-parks for workers living in their cars while working two or three jobs.

Inequality of income distribution is what is causing the crisis we are in. The banks pulled the trigger but income inequality loaded the gun.

If I had my way I would raise unemployment, and all other govt pensions and allow the economy to trade out of the mess.Too many people just have to kick the down and out though for that to happen.

I'm not on govt benefits as I have created income from investment but I do work on 6 hour contracts and have not had any work for 5 weeks and am not included in the stats.I know dozens of others getting too little work now who are not included and unfortunately do not have 'lazy' income to fall back on. These people will often not show up in the figures but their lack of spending power is showing up in the decline in profits of retail and service businesses.And we look to be falling into the liquidity trap that the USA, Japan and Great Britain is in.

However you will know when the downturn becomes a depression by the groups of angry young people hanging around in the parks and corners of streets. You can see them now in major cities across the world. So far that hasn't happened here.Labour force participation peak is a long way off.

GetItRight:

11 Oct 2012 1:35:34pm

It is not possible for business to pay wages below the level needed to live, unless there is a social security system to make up the difference.

If there were no social security system and businesses payed wages below the level needed to live, people would be starving to death and businesses would need to continue to find replacement people. Businesses would not bother, they would just wait until they could afford to pay someone a good wage - a liveable wage.

From your post I understand that you believe that there should be equality of income distribution. Do you mean that everyone should be paid the same amount? If you do mean this then you mean that a highly trained doctor should be paid the same as a person who "cleans toilets". If you do not mean that then what do you mean by "inequality of income distribution?

What do you mean by "The banks pulled the trigger but income inequality loaded the gun"?

Where would the money come from to "raise unemployment and all other government pensions.."? Would you want the government to borrow the money? Or do you want taxes to increase? If you want taxes increased then you are saying you want to take more money out of the paypackets of other people, compulsorily, who have worked hard for their money to subsidise the lifestyle of those who are unemployed or on other pensions. How will the economy benefit from that. If you take money from one group and give to another the first group will have less money to spend. If businesses noticed that they were selling more basic food items (say from those getting more unemployment benefit or other pensions) they would increase their prices removing the benefit of the increased pension/unemployment benefit. So the result would be a return of unaffordability of living for those unemployed or on pensions, a reduction in spending ability of those taxed more and an increase in prices for everyone. Such efforts would discourage those in a position to do the trading "out of the mess".

If businesses are paying a wage less than the amount needed to live then they are providing opportunity to those on pensions or unemployment benefits to earn extra income and gain experience. As I said initially, businesses would not bother to waste money on people who are going to starve to death.

Sharra:

11 Oct 2012 4:55:34pm

Actually it is possible for employers to pay wages below the level needed to live and they have done so many times throughout history. In the 19th century when the employers stated that they were not employing people but their hands and they had no responsibility for the worker, nor any interest in the survival or the worker. That is where the term factory hands came from. If the worker died then they would be replaced. Workers in that time did die of starvation because they were not paid enough to live while their employers became very wealthy. There was NO social security at that time in history.

Some businesses today would care that their workers did not die of starvation but there are others who resent having to pay them anything at all. It all depends how greedy the employer is and how many regulations exist to protect the worker.

It would not matter to the employer if there was a social welfare system or not but it makes a huge difference to the employee to have a safety net to protect them from starvation. Although these days it is so hard to live on the dole that starvation is not that far off for many.

Rae:

11 Oct 2012 5:31:44pm

Every time historically wealth distribution gets too far off average we have a depression. Check the history of depressions.

The wealthy don't spend enough to support economies.There just aren't enough of them. They begin to invest and bankers create crazy instruments to get a bit of the action. Gosh once they even invested in tulips they had so much excess income to play with. So yes at a certain income level I think taxes should increase. How much money do you need before you are happy?

No I believe trained personnel such as doctors need to be paid more but not more than about 10 times the wage of the cleaner. In fact that was a poor example when patients are dying due to VRE created by lack of cleaning in our hospitals. Cleaners are damned important people and if they do their job well can help us avoid infection. 10 times income for the highest worker in an organisation would mean that the lowest paid would be doing very well.

And I don't see a problem with governments borrowing when interest rates are low and there is little inflation. I would expect them to do their utmost to avoid a liquidity trap.

And it is not about food which is traditionally cheap right now.People are not starving in the streets but they are living in them.In American cities workers are living in cars because they don't earn enough to pay the mortgage or rent. They shower in the malls before going off to work. So yes some places pay some workers less than they need to live as we expect to here.I've talked to these people and the last six years have been very hard for a lot of them. I don't want that to happen here.

PILOTYODA:

11 Oct 2012 4:17:33pm

I have 9 years to reach th official retirement age, but couldn't afford to retire then, unless poor health forces me out. I would need to work full time until I am 70 to see any superannuation payments cause a reduction in my pension.

Not all of us have great super packages, or earn enough to either get enough super, have good savings or add to existing super.

I have worked hard all of my life and saved where possible. But none of this means(a) I can retire early, or(b) my retirement will be anything other than austere.

Even with a number of qualifications and many skills, it is very hard to change jobs, upgrade or get a promotion, so old fashioned hard work till my late 60's is my only outlook.

I would be looking for work in my 60s if I no longer had this job, but would I have much success? Should I give up and reduce the participation rate? As said before, If I got a job as a school crossing supervisor, the income would not even register an effect on benefits, but I would be classified as employed.

traveller:

11 Oct 2012 7:12:03pm

I know a lot of people in the same boat you are in, have you looked at retirement in Thailand/Vietnam/Cambodia or Malaysia. I intend to retire in Thailand next year when I turn 65, if I was to remain in Australia I would have to work to 70 at least to get any sort of comfortable retirement. Living in Thailand is about half the cost of living in Australia, do some research, you will be pleasantly surprised, good luck.

Tax U Bet:

Huonian:

11 Oct 2012 1:34:12pm

In the late 60s and 70s, a fair proportion of economics lecturers were spouting Marxist nonsense and you may have been unlucky enough to cop them as your tutors. Looks like you were served up the Marxist "reserve army of labour" crap. Thankfully, the standards have improved a lot since then and there's a much greater mix in the economics academy. Economists today are trained to give evidence priority over ideology. So, the failure of socialist economies worldwide is now seen as evidence that socialism is crap, whereas back then the leftie academics were still singing the praises of the USSR, Mao etc etc despite the evidence.

"Full employment" will always mean a small percentage are unemployed. A small number don't want to work (and not all are on the dole). A larger number want to work but have no skills or have only skills that nobody is willing to pay for nowadays. And there'll always be a few who want to work but have such an obviously bad attitude that nobody would dream of employing them. And there are always some folk who are in the process of switching jobs and who will therefore show up in the unemployment figures, albeit briefly. If you add those various groups together, it seems to be around 5% of the workforce at any given time. It's not a capitalist conspiracy. It's just that not everyone is the same. If unemployment rises above 5%, then there will be some who are skilled or semi-skilled and able to work but can't get a job. And that's clearly happening here in Tasmania. And, as other posters have pointed out, the raw unemployment figure tells us nothing about people who are underemployed.

Anyway, the capacity for the big end of town to determine the levels of employment and unemployment is much overstated. It's much more determined by decisions you and I make - such as shopping, banking or getting the news online, buying fuel efficient cars made overseas instead of the fuel guzzlers made here, using email instead of snail mail, eating less meat and so on. I know that doesn't fit the narrative of those few who still spout socialism, but that's how it is. As consumers, we rule. Not individually, of course, but it's us collectively that's causing job losses at Fairfax, Ford, Qantas etc because we are buying less of their stuff. And our change in consumer choices is creating jobs elsewhere - a fair bit of that overseas. Which is a good thing for countries who do not have our standard of living.

firthy:

11 Oct 2012 3:55:25pm

Your second and third paras really nails the issue Huonian (I personally agree with the first too but lets avoid those arguments here). A fair number of posters to the drum have an aversion to economics but supply and demand economics (microeconomics) does do a good job of explaining what goes on in society. Our demand for the goods and services you mention has fallen hence the numbers of those employed in those industries has fallen.

Jules:

Applaudanum:

11 Oct 2012 6:57:17pm

I disagree with your comment that we consumers, collectively, cause job losses at the businesses we stop going to.

Business have the ability to change their services and products in order to meet the changing demands of the collective consumer. Fairfax, Ford and Qantas could all alter their product in order to satisfy the needs of the modern, collective, consumer. They choose not to do this. Whether it's too hard to change, or too uncertain, they plod on providing the same old services hoping things will pick up soon, while the Board and CEO still rake in fat salaries. The people who own large amounts of stock/shares in said companies sell up at the highest price, then the overall price begins to fall, leaving the little mum+dad type shareholders. Entitlements go, then the jobs. It's the people scraping by, just a few (hundred) of the collective consumer, who lose out.

Sure, the collective consumer forces a business to respond. But it is always the business who decides what that response will be, and they normally take the option that provides a short-term windfall. Losses can be socialised.

Billie Blue:

Troy:

11 Oct 2012 7:37:41pm

We're not buying expensive (or expensive to run) products because the cost of living is increasing while the vast majority of salaries is stagnant... perhaps you should factor that into your 'capatilism solves everything' speach, also your debate would be more powerful if you didn't spend so much of it attacking idioms...

Rapunkzel:

12 Oct 2012 1:34:43am

5% being the optimum unemployment or 'full employment' rate is not atrributable to Marx. It is considered mainstream economic theory!

I quote: "Last month a senior Treasury officer, David Gruen, told a Senate committee it was ''a long-standing practice'' to regard full employment as 5 per cent, although there was ''a reasonable band of uncertainty around that number''.

I guess the first thing to understand is that, to an economist, ''full employment'' doesn't mean what you and I think it does. It doesn't mean everyone who wants a job has found one.

Rather, it refers to the lowest sustainable rate of unemployment. That is, the lowest rate to which unemployment can fall before shortages of labour lead to excessive wage increases and start pushing up the rate of inflation."

That was from an article by Ross Gittens in the Age published July 10, 2010. You can look it up and have a nice little education about why this isn't Marxist theory.

I'd really like to know what universities these Marxists economic lecturers were working at in the 60s and 70s. I thought that the red scare was on then and the west was fighting a cold war? Yes, I believe there would have been socialists on campus and even amongst some of the lecturers, but economics? You've got to be kidding me. But if you can give me some examples I'd be VERY interested.

kali:

11 Oct 2012 10:26:51am

What these stats also don't consider are the people that do not exist in the formal economy. The range from people whose income is derived from illegal activities (including drug dealing, prostitution and a thousand other things) to the huge numbers of people who just work for cash, either for themselves or in industries where this has always been the way it works.

For anyone who has sort a service of any kind, you will know that the cash economy is huge, and probably larger now under the GST than it was 15 years ago.

Billie Blue:

11 Oct 2012 7:25:07pm

Certainly there is PLENTY of work out there if you wish to work illegally in Australia for cash under the table. You'll have to live in a flop house and share your room with 20 other illegals, but the work IS there. It's legal work that's in short supply. And work that is able to maintain a life and family is in even shorter supply. But there we go, Australia keeps on voting in politicians who are building this disaster on purpose.

john:

11 Oct 2012 10:48:12am

My girlfriend isn't listed as participating as I earn $50k and she therefore isn't eligible for any govt. assistance. There are numerous other quirks that make these statistics only good as a rough measure.

As an academic exercise I'll concede your suggestion of a peak in the graph is likely, but what is actually happening is a separate issue.

If a family could live on a single income, this wouldn't be such a pressing issue.

libertarian:

11 Oct 2012 12:01:14pm

It is an unfortunate consequence of socialism and low productivity. In a Libertarian system your girlfriend would be considered an individual and your relationship status would be none of the governments business.

Applaudanum:

11 Oct 2012 2:12:27pm

You forgot to add, libertarian, that in a Libertarian system, john's girlfriend still wouldn't get government assistance. If loses his job (heaven forbid), neither of them will be eligible for government assistance.

PILOTYODA:

Unfortunately, Libertarian, ours is anything but a "socialist" system. Ours is a capitalist plutocracy, where those with the most seem to get the biggest say and receive the greatest benefits.

Changes over recent times reduce the poorest and most vulnerable in our society to a level where they can barely exist, while the wealthy have had many tax cuts and receive the greatest benefits for thngs like education, health care and superannuation.

The only thing socialised recently have been the losses of very large businesses, where the taxpayer picks up the tab.

MJLC:

11 Oct 2012 12:49:48pm

Don't be too concerned about the reply you received at 12:01 John - you could have made a comment on any topic from the tragedy of unwanted puppies post-Christmas through to the value of the off-side rule in soccer and still managed to get the same response. Funny things libertarians - they have a problem with people interfering in their lives, but seemingly have no difficulty inserting themselves in ours whether wanted or not.

MJLC:

11 Oct 2012 11:29:53am

This is a complicated topic with a number of interlocking strands that can't be covered by one post, but I'll offer up the following on the understanding that it's only one small part of the puzzle. In the rush to explain "productivity" the supposed wise ones never seem to be able to bring themselves to use either the word or concept of loyalty. Loyalty cuts both ways. Employers (at least in theory) like the idea of loyal employees, as indeed they should - when you want to contribute and you care about what you do, productivity flows (together with the dollars) as a natural consequence. However, much of that is a reciprocation of being welcome in that workplace to begin with - people (a) like to know they are wanted, and (b) like to know what they are doing is both appreciated and valuable to the overall success of the enterprise. Neither of these requires effusive praise and/or multiple daily hugs - it's a basic human trait to be able to smell out whether an environment is welcoming or not. Take this "unbalancesheetable" quality out of the equation and it's hardly surprising that something - although you can't seem to put your finger on it - seems to be badly off-kilter. This rotting of the organism from the inside out is actually far worse than the numbers presented by Mr Janda suggest - the problem is masked to a large extent by people who have no other option but to grit their teeth and stay in a situation and wait (in vain) for the one Powerball. When a society descends to a state where fewer and fewer people actually care what they're doing to put bread on the table, then that society has deep and possibly terminal problems. The under-utilisation of the available talent in this country is both frightening and economically self-defeating, and it can only be addressed one piece at a time. You would have to say that in a situation where there are "managers" and "workers", and that it isn't "managing" to cope very successfully, then spending your energy finding new ways to whip workers into shape does seem to be missing the bigger picture.

citizen:

11 Oct 2012 12:00:54pm

Many young people with 'no experience' and many who are condisered too old become depressed by trying unsuccessfully to find work. They give up and live at below poverty level, surviving only with help from family.

When policiticians spruke that a family with income of $100,000 is not rich, a person who can't get a job dies inside.

Sometimes people living outside Sydney can only find part time work where travel costs make it a net zero exercise.

It may also be a sign of failure of the structures that Howard set up. It appears that a person registers with a particular organisation and can't apply for jobs that other organisations have on their books. ???? Pot luck with people's lives.

monica:

11 Oct 2012 12:13:56pm

The Centrelink is recommending to anyone who is unemployed but has kids to go on parenting payment (PP). That's probably over 100,000 Australians. These people are not considered as unemployed. Which is false.

Then you have disability support pension recipients etc etc Same story

It would wiser to see how many people are actually full time employed and compare it to the total population.

luke warm:

11 Oct 2012 1:43:29pm

Unemployment statiistics are NOT derived from Centrelink data, and have no direct link to those on unemployment benefit or any other benefits. They are determined from surveys done by the Australian Bureau of Statistics. These are interviews of about 29,000 people Australia wide. The results are then extrapolated over the population. So those on parenting or disability benefits are not excluded from the statistics.

Subtracting the number of full time employed (whatever that means) with the population won't give you the number 'unemployed'. Even if you allow for people still in school and university, and those who have retired, there are still many people of working age who choose not to work. My wife is one, and so are the wives of 2 of our near neighbours. There are others quite happy to work limited part time hours (my niece does this so she can spend time raising her kids - that's 'full employment' for her.

harvey:

11 Oct 2012 1:15:10pm

Unemployment statistics, like that saying in Alice in Wonderland, are set up to mean whatever you want them to mean.So in times of massive unemployment in the 1980s, the definition of "unemployed" was changed drastically to hide the numbers of unemployed.

So from then on you weren't "unemployed" if you had a paying job for at least one hour (lol) a week.

So that is the definition we use right now. It serves business because its like, whoa, we have a big labour shortage problem.

Except that we don't. What we have is a large number of underemployed, underskilled people some of whom have dropped out of the workforce.

Billie Blue:

Austin:

11 Oct 2012 1:24:43pm

At the time of posting this comment there were 19 comments. Regarding Julia Gillard's speach there were 900! THE most important issue is jobs. People without jobs have a low standard of living, unemployment creates huge social problems. A ridiculous speach however attracts the most attention. Who cares!

R U Serious:

11 Oct 2012 6:30:09pm

Austin, I understand your concern. Unemployment is definitely a major issue for society, just for example higher unemployment is directly connected to higher crime rates. However, the status of women is also of great consequence. Women should not feel like lesser beings because they are women. The quality of day to day life within relationships both private and public is the issue being confronted by the House of Representatives at this time, albeit in a seemingly roundabout way. The battle has been coming since the 1970's and it has taken a woman Prime Minister to bring it to a head. More power to her. It is not just lack of money or jobs that makes people poor.

Sam Y.:

The increasing power of technology, if nothing else, is going to maintain the rate of per-worker labour productivity increase well into the future.

What does an exponential increase in productivity mean in the long term?

A capital investment in labour will reap exponentially increasing dividends, and so a high participation rate will lead to a monstrous concentration of wealth and a consequent power disparity between the workers and the owners. Conversely, if we aim for a more equitable society, the rate of participation and/or the degree of employment will drop precipitously. This is not a bad thing: a population who, on the whole, need not work more than a day or two a week is a population that can more fully engage in the fruitful leisure enjoyed now only by the very wealthy. Let us not conflate employment with social welfare: a job is a means to an end, not an end in itself.

It's not a matter of welfare, or bludging, or job creation. It's a question of where we want our society to be in 30 years, and making the decisions now that will lead us there.

Thelmus:

12 Oct 2012 5:52:27am

Well said. It seems that the disparity of wealth has been lost in the discussion with regard to its impact on power and influence. Its strange to think that growing up as a kid, I can remember that the vast majority of mothers were stay-at-home. Indeed, I don't think that term was even used! I do not begrudge the egalitarian principle of equal employment but it does seem strange that we have gone from a society where families could not just survive but LIVE on a single income to one where both parents working does not always mean the mortgage is safe. How did it come to this. Yes the roads might be better, the hospitals might have fancier ways to keep us alive, but the problems of poverty still abound! When a pensioner has to wait three months to afford red meat or a single mother has to choose between her education and that of her kid, what good is a fancy road or a Machine that goes "beep" as well as "bing". I always had it in my head that our society was not just about the good of some, or the even the majority, but the good of ALL. All too often I read in these posts the unwritten words that are effectively promoting "I'm alright, don't rock my boat" without a thought for others. We compete in this life for Mcmansions and sports cars and boats and never ask why? A porsche is a beautiful car, but for the price how many pensioner's bus fares could be bought? How many children spend their time alone, un-supervised and perhaps to them "uncared for" so dad can afford one. The beaten up old ford or holden or toyota will still get you there. My point is that life's richness is rarely found in such things but definitely can't be found if you're struggling with food and a roof over your head. Helping a friend in need is the richest experience a person can have.

Applaudanum:

11 Oct 2012 2:21:31pm

According to the statistic presented in http://finance.ninemsn.com.au/newsbusiness/aap/8546330/aust-jobless-rate-rose-to-5-4-in-sept , the participation rate went up from 65% to 65.2% in September. I assume the statistic originates from the BAS.

Steve Mount:

Quote :"However, there are limits to what proportion of the population can work at any one time...."

During the '60s and '70s, unemployment was essentially nil, and so was social welfare, so, theoretically speaking, it is possible.

In times of good growth the triumverate of low interest rates, low unemployment and low inflation rates can be achieved. Beyond that, one has to slip. And so, on to part time work, and underemployment. The stats of employment are a farce, and have been for many years.

The Federal Government has, for quite some time, had an eye on increasing the retirement age so as to reduce the social cost burden. In that very same, employment opportunities for those in their latter years have decreased markedly, and so too for the younger and inexperienced. Just recently, the PM has announced changes to single parent recipients.

So, if the employers aren't interested, and the Government isn't interested, what happens to those who don't fit the mould?

MMNNNnn:

11 Oct 2012 3:01:00pm

There have been a number of comments about the number of hours worked a week to not be considered unemployed. I believe the number is actually one hour a month. You are underemployed, not unemployed and counted in the stats.Many years ago I had a spate of being unemployed. Both Centerlink and the employment agency would find courses for me to do. Each course would run the last day of one month and the first day of the next month. As I was doing a course, I was not unemployed for the two months. I had been training, it did not matter that the course ran for three hours each day, I was undergoing training. The funny thing was that if centerlink ran it's course Jan-Feb, the employment agancy ran it's course Mar-Apr.As a result I was not actually unemployed for the whole 8 months I did not have a job, I was undergoing training. I still received Newstart, but was not classed as unemployed.Each course would have approx 15 attendees, you learnt nothing, and it got your activity sheet sheet ticked for the fortnight.Getting off the soap box now.

JMJ:

11 Oct 2012 3:37:35pm

Michael, but for the fall in price of coal & iron ore, the total number of jobs in Australia may have been greater than the 14,500 increase for the month & a much higher figure than the 11,511,900 in employment. Overall Australia is doing well & Labor should be congratulated for its fiscal discipline.

John51:

11 Oct 2012 5:08:12pm

Michael, thanks for clarifying this statistical measure. Work, education, women in work and period of retirement has all changed so much over the decades. As has the no of people working part time and casual work. So it is difficult to say if this method has any real comparative value anymore.

When I started work the large majority of us left school by 14, 15 if not 16 at the latest. Now most finish high school, with at least 40% or more going on to higher education. Although in saying that I realise many of these young people work at least part time.

Than of course we have the dramatically change in women participation over the decades. And of course this is clouded by whether these women are working full time or part time as well as whether they are in permanent work or casual.

Than when we come to the over 50s we have a mixed bag of reasons. Some retired early because they had the super to do so. Others were forced to retire early because of injury or health reasons. And others are unable to get work because they do not have the skills for the available jobs, or simply because of age discrimination.

And last of all we have the fact that people are living much longer. If we are including people aged 65s, and older, in workplace participation, than people living much longer has to be skewing the outcome over the decades. After all we have many more people now living into their 80s and 90s who once would have died in their 60s and 70s.

floss:

11 Oct 2012 9:28:48pm

The dynamics of society are changing.

Many young people can no longer afford to have independent housing as their lower rates of pay do not cover rent, utilities bills and leave enough otherwise to live on, much less have fun. So if possible, they stay at home with their parents. Then they can still have fun.

The consequence of not having to be responsible for one's own support is that when funds are available a good time is had by all. When funds are not available, well, 'the olds' still provide a roof over the head and meals on the table.

Trouble is, the funds of many parents have become significantly depleted. Therefore an ultimatum is being delivered to many young people to get work and pull their own weight, or else!

Perhaps this is a factor that helps explain the current lower rates of participation of young males. This may change very soon.

Anti-Libertarian:

11 Oct 2012 10:27:26pm

To Libertarian: Funny how the worst recession in 70 years was caused by libertarian economics, also known as free-market fundamentalism or neo-liberalism. Can't blame the Labor movement for that one, much as I know you'd like to.

Bad science:

11 Oct 2012 11:29:52pm

Less women work fulltime jobs because they don't want to work. Fabulous. Women dont want to and as a result they don't merit better jobs or pay or any other increased opportunities or incentives or more women friendly workplaces - why bother when they just dont want to work. Thanks for this info and he statistics that prove this. Great work.

Susan:

11 Oct 2012 11:49:08pm

20 percent of women work fulltime. The majority work part time. 90 percent of men work fulltime. 2011 statistics.Times have changed. It is acceptable for a woman to have a casual job and less popular and acceptable for a woman to work fulltime cause it is all too hard. Rationalize that.